London equities moved higher on Thursday, recovering from the previous session’s decline as investors weighed signs of progress in U.S.-Iran negotiations against ongoing military tensions across the Gulf region.
In early trading, the FTSE 100 gained 0.18%, while sterling remained broadly unchanged at 1.3423 against the U.S. dollar. Across Europe, sentiment was similarly constructive, with Germany’s DAX rising 0.33% and France’s CAC 40 adding 0.51% by 07:24 GMT.
Market confidence was supported by comments from U.S. President Donald Trump, who expressed optimism over the prospects of a near-term agreement with Iran. Trump said the United States would recover Iran’s enriched uranium “in the not-too-distant future” and described negotiations as going “very well,” adding that a deal could potentially be reached “over the weekend.”
Further support came from U.S. House Speaker Mike Johnson, who said the administration was working on the “final piece” required to reopen the Strait of Hormuz. His remarks followed discussions at the White House involving Trump, Vice President Vance and Secretary of State Marco Rubio.
Despite the positive rhetoric, negotiations remain delicate. Iranian Foreign Minister Abbas Araghchi stated that “no tangible progress” had been achieved in talks with Washington, while Iran’s Tasnim News Agency reported that communications between the two sides had been suspended for several days.
Rubio also struck a cautious tone during testimony before Congress, saying Iran had yet to provide “final sign off” on several key issues, including the transfer of its highly enriched uranium stockpile and the reopening of the Strait of Hormuz. He emphasised that sanctions relief would not be considered without substantial concessions from Tehran.
Elsewhere in the region, Israel and Lebanon agreed to renew a ceasefire arrangement and establish pilot security zones excluding Hezbollah forces. However, reports from Lebanese state media indicated that Israeli drone strikes were carried out in southern Lebanon shortly after the agreement was announced, underscoring the fragile nature of the situation.
In Washington, the U.S. House of Representatives passed a war powers resolution by a vote of 215 to 208 that would require congressional approval for continued military action against Iran. The measure is largely symbolic, however, and is not expected to gain sufficient support in the Senate.
Away from geopolitics, investors received encouraging domestic economic news. The UK new car market recorded its strongest May performance since 2019, according to data from the Society of Motor Manufacturers and Traders (SMMT), with registrations increasing around 7% year-on-year.
Electric vehicle adoption also continued to strengthen. Battery electric vehicles accounted for 27% of all new registrations during May, lifting their share of the market to 24% so far this year. While still below the government’s mandated 33% target, the trend points to continued momentum in EV adoption.
UK Corporate Highlights
Mitie Delivers Strong Annual Growth
Mitie Group (LSE:MTO) reported another year of robust growth, with revenue rising 10.5% to £5.62 billion for the year ended March 2026. The facilities management specialist also recorded higher profits and cash generation, while its bidding pipeline reached a record £31.7 billion.
CMC Markets Upgrades Income Outlook
CMC Markets (LSE:CMCX) increased its net operating income guidance to between £460 million and £480 million after reporting record annual earnings. Chief Executive Lord Cruddas attributed the performance to heightened market activity driven by volatility across tariffs, geopolitical conflicts and commodity markets.
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